Toussaint, who has died after a heart attack aged 77, was one of popular music’s great backroom figures: a talent scout, record producer, studio owner, singer and arranger. His early proteges included the singers Lee Dorsey, Irma Thomas and Ernie K-Doe, and he went on to collaborate with some of the great names of rock, including the Band, Paul McCartney, LaBelle, Robert Palmer and Elvis Costello.

Showing a precocious understanding of the predatory machinations of the music industry, He formed his own companies at the start of his career and took firm control of his own destiny – at least until his home and its contents were washed away by Hurricane Katrina in 2005. The disaster forced him to embark on an unexpected but highly successful second career as a performer.

Toussaint was born in Gert Town, a district of New Orleans populated mostly by African Americans. Both his parents loved music. His father, Clarence, a railway worker, played the trumpet with a big band at weekends and his mother, Naomi, loved opera. As a child Toussaint became steeped in gospel music and, inspired by Albert Ammons and Pinetop Smith, learned to play boogie-woogie on the piano, before exposure to the records of another pianist, Professor Longhair, reshaped his ambitions. His mother sent him at the age of eight for piano tuition in the junior music school of Xavier University of Louisiana, Gert Town. After barely half a dozen lessons, however, she withdrew him. “It’s too late,” he remembered her saying. “The boogie-woogie’s got him.”

He was 13 when he and a friend, Snooks Eaglin, who played the guitar, formed a group called the Flamingos, playing at school dances. At 17 he attracted attention while playing at the Dew Drop Inn in New Orleans, and deputised for Huey “Piano” Smith, a local hero, with the band of the guitarist Earl King. Soon he was recruited by the local bandleader Dave Bartholomew, Fats Domino’s musical director and a noted talent-spotter. His first hit as a producer, in 1957, came with the saxophonist Lee Allen’s Walking With Mr Lee.

In 1961, his production of a semi-nonsense song called Ya Ya opened a long string of successes with the singer Lee Dorsey. “He had a happy voice and he wasn’t too cool to sing a humorous song,” Toussaint said, adding that his own compositions were usually tailored to the personality of the singer. “Many times I wait until the artist is near and I can see them, see how they feel about themselves, how they would like to feel about themselves.”

Toussaint was drafted into the US army in 1963, but a windfall came when the popular trumpeter Al Hirt had a Top 5 hit with Java, a tune from Toussaint’s first album. Another of his instrumental pieces, Whipped Cream, became the title track of an album by Herb Alpert and the Tijuana Brass in 1964.

After two years in the army he returned to the studio with undiminished success, producing the early recordings of the Meters, featuring Art Neville, including Cissy Strut and Look-Ka Py Py. In 1970 he was encouraged to try a career as a singer, releasing the first of three albums for the Warner Brothers label. He provided horn arrangements for the Band’s famous 1971 concerts at the Academy of Music in New York, and produced In the Right Place, a hit album for his old protege Mac Rebennack, better known as Dr John.

In 1972, with his business partner, a sales and promotion man named Marshall Sehorn, he founded Sea-Saint Studio. There he produced the young British soul singers Robert Palmer, Jess Roden and Frankie Miller. Little Feat recorded his blues-ballad On Your Way Down, and Boz Scaggs had a hit with the plaintive What Do You Want the Girl to Do. In 1974 Toussaint arranged and produced LaBelle’s New Orleans-flavoured disco classic Lady Marmalade, and a year later he played on McCartney’s album Venus and Mars.

After fleeing the aftermath of Hurricane Katrina, he spent two years exiled in New York. There he collaborated with Elvis Costello on an album about the disaster called The River in Reverse (2006), and his late-blooming career as a performer began when he accepted an offer to play a regular Sunday brunch session at an East Village pub. “I never thought of myself as a performer,” he told me last year. “My comfort zone is behind the scenes.” But his gentle voice, his exquisite piano-playing, the vast repertoire of songs full of wry wisdom, his dandyish wardrobe and his elder-statesman charm made him a great attraction at festivals and clubs around the world. In 2013 he collaborated on a ballet with the choreographer Twyla Tharp and received the National Medal of Arts from President Barack Obama.

It was in a Madrid hotel room, shortly after a performance, that he died. He had been due to perform in London this Sunday and in New Orleans next month with Paul Simon, at a benefit for a charity for the hungry and homeless that he co-founded in the city 40 years ago.

He is survived by a daughter, Alison, a son, Clarence, and six grandchildren.

• Allen Toussaint, musician, born 14 January 1938; died 9 November 2015